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Cite as: [1997] EWCA Crim 1764

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SIMON ANTHONY FUSSELL RUDOLPH ASSIZ DE MENDONCA, R v. [1997] EWCA Crim 1764 (9th July, 1997)

IN THE COURT OF APPEAL No 96/4236/X4, 96/4238/X4
CRIMINAL DIVISION

Royal Courts of Justice
Strand
London WC2A 2LL


Wednesday 9th July 1997

B e f o r e:

LORD JUSTICE OTTON

MR JUSTICE BLOFELD


and

HIS HONOUR JUDGE BEAUMONT QC
(Acting as a Judge of the CACD)


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R E G I N A

- v -

SIMON ANTHONY FUSSELL
RUDOLPH ASSIZ DE MENDONCA

- - - - - - - -

(Handed-down judgment of Smith Bernal Reporting Limited
180 Fleet Street, London EC4A 2HD
Tel: 0171 831 3183
Official Shorthand Writers to the Court)


- - - - - - - -

MR A SUCKLING QC & MR H GRUNWALD appeared on behalf of the Appellant Fussell
MR W RODDICK QC & MR A MARSHALL (Miss Gomes 9/7/97 only) appeared on behalf of the Appellant Mendonca
MR D FARRAR QC & MR NJ COLEMAN (Miss S Clarke 9/7/97 only) appeared on behalf of the Crown

- - - - - - - -

J U D G M E N T
(As approved by the Court)

- - - - - - - -

Crown Copyright

Wednesday 9th July 1997

LORD JUSTICE OTTON: In the Crown Court at Southwark (before HHJ Hardy) the appellant Simon Fussell (SF) was convicted of conspiracy to defraud and Rudolph de Mendonca (M) was similarly convicted together with two counts of forgery.

Each now appeals against conviction by leave of the single judge who also referred Fussell's application for leave to appeal against sentence to the full court.

Background

The Crown's case was that between August 1988 and April 1989 SF and M conspired to make a hidden profit from the disposal of Exide House, Shaftesbury Avenue, London W1. SF was director and a substantial shareholder of Priest Marian Holdings (PMH) a public limited company quoted on the stock exchange. PMH was a property company and one of its assets was the freehold in Exide house. SF was also a director and substantial shareholder (and at the material time, Chairman) of Minty Plc (Minty) which was also quoted on the stock exchange. Architectural Trading Company Limited (ATC) was a private company owned by SF (65%) and his wife which in turn had a wholly owned subsidiary Anchorbest Limited (Anchorbest) a property company which later became a subsidiary of Minty. The ground floor of Exide House was leased by PMH to ATC. The top three floors were leased to the London Borough of Camden (LBC). LBC used them to house homeless families.

M was a chartered accountant and stockbroker with CGS Securities, later re-named Whitefriars (CGS).

In the early part of 1998 PMH wished to sell Exide House. On 25 May 1988, Anchorbest (which by now was a subsidiary of Minty) entered into an agreement with PMH to buy Exide House subject to the leases to ATC and LBC for £1.8 million, the value put on the property by PMH's valuer. As SF was a director of both PMH and Minty under stock exchange rules the sale had to be approved by the shareholders of both companies. On 15 June 1988 the shareholders of PMH approved the sale. However the valuation was not agreed by the valuers acting for Minty, mainly because of the uncertain position regarding the lease to LBC which it was feared might become protected on its renewal date. Consequently Minty was not willing to perform the contract and proceed with the purchase.

SF then set out to find an alternative purchaser. Mrs "Katie Chalus" (KC) was found, or rather invented. This woman was said to be of Iranian origin and turned out to be a fiction. The evidence pointed conclusively that F had created her for the purpose of the ensuing transactions. M forged two Powers of Attorney in his favour empowering him to purchase and mortgage Exide House which purported to have been executed by her dated 10 and 22 August 1988. M signed them as a witness. He arranged for an account to be opened for her at CGS.

It was the Crown case that KC had been created to enable SF to buy Exide House for himself and conceal his purchase from the Board of PMH. The sale was duly completed at a price of £1.85 million subject to vacant possession of the 3 floors let to LBC being obtained by 15 October 1991. Within 7 days of the exchange of contracts PMH obtained vacant possession of the top 3 floors. 2 days later M instructed solicitors acting for KC to prepare draft contracts for the sale of the lease of these floors to a Panamanian company. On 26 August completion took place of the sale from PMH to KC. Five days later £37,573 from the funds advanced by a Swiss bank to KC which were surplus to the sale requirement were paid into F's wife's account at CGS.

On 14 October 1988 KC entered into an agreement to grant a lease of the top floors for a term of 150 years to the Panamanian Company Pacific Realty SA (PR) at a premium of £650,000 the effect of which was to diminish the value of the freehold. On completion in November approximately £400,000 went to the Swiss bank to reduce the capital outstanding on the mortgage account and £185,000 went to F's wife's account at CGS. Payments of rent by ATC were used to discharge interest due on the mortgage account.

On 24 February 1989 SF reported to the Board of Minty that an opportunity had arisen to purchase Exide House without vacant possession of the upper floors for £1.9 million. On 24 April KC sold Exide House to Buckingham Place Ltd (BPL) for £1.8 million and BPL sold back to back to ATC for £1.9 million. The money received by KC was used to redeem the mortgage. Funds surplus to this requirement were paid into Pecos Account an offshore company at CGS. Monies were dispersed through a family trust which F had set up.

Subsequently, the DTI brought proceedings against SF seeking an order for his disqualification from acting as a director. In reply SF swore 2 affidavits dated 16 August 1994 and 16 January 1995 in which he admitted that KC did not exist. These were handed to the police on 14 March 1995. When interviewed both defendants denied the offences.

The Trial

Proceedings were commenced and the case was transferred to the Crown Court under the Serious Fraud Provisions of the CJA 1987. At a Preparatory Hearing on 15 March 1996 the Crown applied for, and was granted leave to amend Count 1 of the indictment to read:

"Count 1
STATEMENT OF OFFENCE

CONSPIRACY TO DEFRAUD

PARTICULARS OF OFFENCE

Simon Anthony FUSSELL and Rudolph Assiz Joaquin de MENDONCA between the 1st day of January 1988 and the 31st day of December 1989 conspired together to defraud Priest Marians Holdings Plc and Minty Plc

(i) by falsely and dishonestly representing to them :-

(a) that the sale of a Exide House, Shaftesbury Avenue, London, from PMH to Mrs Katie Chalus was a bona fide sale to an independent purchaser;

(b) that Katie Chalus existed and was the genuine purchaser of Exide House;

(ii) by dishonestly concealing :-

(a) (from PMH of which Simon Fussell was at all material times the Chairman) the intention that Katie Chalus should profit from granting a leave to Pacific Realty;

(b) (from PMH) the intention that such profit should accrue to those charged;

(c) (from PMH and Minty, of which Simon Fussell was at all material times the Chairman) that, between the sale of Exide House by PMH and its purchase by Minty, profits had been made by those charged through the purchase of Katie Chalus;

(d) by dishonestly making secret profits from the purchase by Katie Chalus, the leave to Pacific Realty (in the form of premium and rents) and the sale of Minty, Simon Fussell being at all times Chairman of PMH and Minty."



The precise wording of the indictment is critical to this appeal.
The trial began on 22 April 1996 and the jury retired on 21 May. The jury convicted SF on Count 1 and acquitted of Count 2 and 3. M was convicted on all 3 counts.

Neither defendant gave evidence at trial.

On behalf of F it was said that neither PMH nor Minty had lost in reality and that there was no evidence that he was involved in the sale to KC or in the large sums passed through the Pecos accounts. M was operating other people's accounts at CGS without their knowledge and was involved in other property transactions which did not involve F. KC was not concealed from Minty in the documentation and there was nothing unusual from sub-sales from one company to another on the same day or in the use of a nominee.

For M it was said that he was a successful business man, the sale of the leave of Exide House did not produce a profit but simply diminished the freehold which could be recovered in a rising market. There could not have been an agreement to defraud Minty because neither appellant could have known at the start Minty would be a buyer in 1989. Monies in the Pecos account could have come independently from the sale of Exide House. M believed KC existed. If she was a fiction, she was created by F. In his affidavit M stated that he believed he had met a lady who he thought was C at Heathrow Airport.

The jury convicted SF on count 1 and acquitted on counts 2 and 3. M was convicted on all three counts.

Grounds of Appeal

Ground One

Both appellants assert that the learned Judge misdirected the jury on the offence of conspiracy to defraud when he told them that, although the Particulars of Offence alleged a conspiracy to defraud PMH and Minty they could convict if they were sure that only one company had been defrauded. It is said that the case was opened to the jury on the basis that both companies had been defrauded, the trial proceeded on that basis and that Crown counsel in his closing speech made the same statement. However, in the course of his closing speech to the jury, leading counsel for F addressed the jury on the basis that the agreement alleged was to defraud PMH and Minty in the terms set out in the Particulars and they could only convict if satisfied that both companies had been defrauded. The judge interrupted the speech and in the absence of the jury raised the question of the Crown having to prove that both companies were defrauded. He then ruled that if the jury was satisfied that any one company was defrauded this was sufficient for then to convict. The direction which is criticised is at 10F-11D :

"One final matter before leaving my directions to you on this count. The allegation by the Crown is that Mr Fussell and Mr Mendonca conspired together to defraud both PMH and Minty, and Mr Glass for Mr Mendonca told you on Friday that that meant the Crown had to prove both companies were defrauded, or there was an intention to defraud both companies before you could convict. That is not so, in my view, and I direct you that if you are not sure that both companies were defrauded, but are sure that one was, so long as you all agree as to which one, that would be sufficient for a conviction.

Let me give you a similar example. Suppose there is a charge of conspiracy to rob bank A and bank B in the same High Street. Suppose you were quite satisfied there was ample evidence in regard to bank A but, for some reason, not sure about bank B. It would not be sensible or just in those circumstances for you to have to be directed to acquit the defendants in regard to bank A, and I do not do so here in these particular circumstances."


In effect, counsel argue that the judge ruled that for "PMH and Minty" the jury could read into the indictment "PMH and/or Minty". This, it is submitted means that the defendants were at risk of being convicted of three different conspiracies; (a) to defraud PMH and Minty (as originally alleged) or (b) to defraud PMH or (c) to defraud Minty.

In support of the argument Mr Alan Suckling QC on behalf of Fussell cited R v Greenfield [1973] 57 CAR 849 where the defendants were convicted of conspiracy to cause explosions. The prosecution sought to prove the existence of the conspiracy by calling evidence about 25 explosions or attempted explosions which had occurred in different parts of England during the period specified. The Court of Appeal held that a count for conspiracy is bad for duplicity if it charges more than one conspiracy. Duplicity in a count is a matter of form; it is not a matter relating to the evidence called in support of the count. In so holding the Court confirmed the line of authority from R v West and others , R v Dave and others , and R v Griffiths and others .

In order to evaluate this submission it is necessary to consider the particular nature of a Conspiracy to Defraud. The Criminal Law Act 1997 reformed the law regarding criminal conspiracy and by s.5(1) abolished the offence of conspiracy at common law. S.5(2) made an exception for the offence of conspiracy to defraud which was not to become a statutory "offence of conspiracy" under s.1 of that Act. In R v Ayres [1984] 1 AER 619 HL, it was held that this remaining common law offence of conspiracy to defraud was limited to fraudulent agreements which, if carried into effect, would not necessarily result in the commission of a substantive criminal offence by any of the conspirators.

The Fraud Trials Committee, chaired by Lord Roskill, reported in 1986. At para 3.11 they commented on the problems faced in this field as follows:


"In any fraud cases a charge of a substantive offence or of a statutory conspiracy to commit a substantive offence will be entirely appropriate and the maximum penalties adequate. In some cases, however, the only substantive offence available may be a relatively minor offence carrying a low penalty or a series of minor offences, or an offence or offences which are perhaps only incidental to the fraud. In these circumstances, the prosecution may find it impossible to prosecute for offences which reflect the totality and gravity of the allegedly fraudulent conduct in what would otherwise be called conspiracy to defraud."

The report went on to consider whether the 1977 Act should be amended so as to enable charges of conspiracy to defraud to be brought in wider circumstances notwithstanding that a charge of statutory conspiracy to commit an offence would also lie or whether a new offence should be introduced.

The Criminal Law Revision Committee also considered these problems, in particular the decision in R v Ayres and made recommendations to which the Government responded. In introducing Criminal Justice Bill 1987 in the Standing Committee debate the Minister of State at the Home Office referred to Ayres and stated that the decision had:

"... two very damaging effects. First in some major fraud cases, the prosecution has had to rely upon relatively minor changes which carry correspondingly low penalties; and, secondly, juries have had to face needlessly complicated trials, either because numerous small charges were brought in a case, or because part of the way through a trial on a charge of conspiracy to defraud, facts emerge which obliged the charge to be dropped and replaced by others. Because there is no substantive offence of conspiracy to defraud, with the sustained, serious, collective dishonesty which that involves, substantial injustices arise."


Subsequently S.12 of the Act provided :



(1) If-

(a) a person agrees with any other person or persons that a course of conduct shall be pursued; and
(b) that course of conduct will necessarily amount to or involve the commission of any offence or offences by one or more of the parties to the agreement if the agreement is carried out in accordance with their intentions, the fact that it will do so will not preclude a charge of conspiracy to defraud being brought against any of them in respect of the agreement."

This section, therefore, enables conspiracy to defraud to be charged in circumstances where the course of conduct agreed will necessarily amount to or involve the commission of any substantive offence or offences by one or more of the parties to the agreement if carried out. The section confirms the decision of the House of Lords in R v Cooke 1986 AC 909.

At common law the leading case on conspiracy to defraud is Scott v Metropolitan Police Commissioner [1975] AC 819 where the following definition was given:

"An agreement by two or more by dishonesty to deprive a person or of something which is his or to which he is or would be or might be entitled, or ... an agreement by two or more by dishonesty to injure some proprietary right (of the victim)." (per Viscount Dilborne at 1039)

No deception is required for this kind of conspiracy to defraud. There is also a separate type of conspiracy to defraud which does require proof of deception. It consists of dishonestly deceiving a person into acting contrary to his public duty. In Welham v DPP [1961] AC 103 Lord Radcliffe at p.123 said:

"Now, I think that there are one or two things that can be said with confidence about the meaning of this word "defraud". It requires a person as its object: that is, defrauding involves doing something to someone. Although in the nature of things it is almost invariably associated with the obtaining of an advantage for the person who commits the fraud, it is the effect upon the person who is the object of the fraud that ultimately determines its meaning. This is none the less true because since the middle of the last century the law has not required an indictment to specify the person intended to be defrauded or to prove intent to defraud a particular person.

Secondly, popular speech does not give, and I do not think ever has given, any sure guide as to the limits of what is meant by "to defraud". It may mean to cheat someone. It may mean to practise a fraud upon someone. It may mean to deprive someone by deceit of something which is regarded as belonging to him, or though not belonging to him, as due to him or his right.

... There is nothing in any of this that suggests that to defraud is in ordinary speech confined to the idea of depriving a man by deceit of some economic advantage or inflicting upon him some economic loss.

Has the law ever so confined it? In my opinion there is no warrant for saying that it has. What it has looked for in considering the effect of cheating upon another person and so in defining the criminal intent is the prejudice of that person: what Blackstone (Commentaries, 18th ed., vol. 4 at p. 247) called to the prejudice of another man's right"

And Lord Denning said at p.131:

"If anyone may be prejudiced in any way by the fraud, that is enough. ----

and

These scholars seem to think they have found the solution. "To defraud", they say, involves the idea of economic loss. I cannot agree with them on this. If a drug addict forges a doctor's prescription so as to enable him to get drugs from a chemist, he has, I should have thought, an intent to defraud, even though he intends to pay the chemist the full price and no-one is a penny the worse off."


It was originally considered by such scholars that this type of fraud consists in dishonestly deceiving a person into acting contrary to his public duty as was the case in Welham. In DPP v Withers [1975] AC 842 some of their Lordships expressed the view, obiter, that this was so. However, in Wai Yu-tsang v R [1991] the Privy Council expressed the view that the cases concerned with public duties are not to be regarded as a special category but as examples of the general principle that conspiracy to defraud does not require an intention to cause economic loss and approved of the broad propositions of Lord Radcliff and Lord Denning cited above.

In the latter case the chief accountant of a bank was charged with conspiring with the managing director to defraud the bank. He failed to cause to be recorded in the bank's computerized ledgers the dishonour of cheques so as to avoid a run on the bank. Lord Goff of Chieveley expressing the opinion of the Board said at p.277F :

"In agreement with the approach of Lord Radcliff in Welham ... the cases concerned with persons performing their public duties are not to be regarded as a special category in the manner described by Lord Diplock (in Scott) but rather as exemplifying the general principle that conspiracies to defraud are not restricted to cases of intention to cause the victim economic loss."

As Professor Sir John Smith wryly comments "This seems to open a very broad vista of potential criminal liability" (Smith and Hogan Criminal Law 8th Edition p.295).

Similarly in R v Moses [1991] CAR 617 the Court of Appeal held that conspiracy to defraud need not involve causing economic loss to anyone.

A recent decision which is critical to the outcome of this appeal is Adams v The Queen [1995] 2 CAR 295 where the Privy Council considered s.257 Crimes Act 1961 in New Zealand. This provided:

"Conspiracy to Defraud- Everyone is liable to imprisonment ... who conspires with any other person by deceit or falsehood or other fraudulent means to defraud the public, or any person ascertained or unascertained ....".

The appellant and co-defendants concealed secret profits they had made through dealings in certain companies, by using an overseas structure of companies and bank accounts to conceal the information. Their convictions for conspiracy to defraud were confirmed on the basis that there must exist in the victim some right or interest capable of being prejudiced, and the entitlement of the company to make directors accountable for secret profits made at the company's expense was such an interest. Where a person was charged with conspiracy to defraud based on economic loss it was necessary for the prosecution to prove that the victim had a right or interest which was capable of being prejudiced either by actual loss or by being put at risk. A defendant who dishonestly concealed from another person information which he was under a duty to disclose to that person, or which that person was entitled to require him to disclose, could be guilty of fraud. Since a company was entitled to recover secret profits made by its directors at its expense, a dishonest agreement by directors to impede a company in exercising its right of recovery would constitute a conspiracy to defraud; and that, therefore, since in relation to all the transactions (except one) the defendant had participated in the use of the overseas structure dishonestly to conceal the information which he had been under a duty as a director to disclose to the company he had been properly convicted. Lord Jauncey, having referred to previous authority, said at p.308:

"Conspiracies to defraud are not restricted to cases of intention to cause the victim economic loss. However, where possible economic loss is concerned there can be no doubt that there must exist some right or interest in the victim which is capable of being prejudiced whether by actual loss or be put at risk."

and later:

"The defendant as a director -- was throughout his tenure -- under a duty, when entering into a transaction with these companies -- to act with perfect good faith and to make a full disclosure to the company in question of all material circumstances --"

and later at 309f:

"Since a company is entitled to recover from directors secret profits made by them at the company's expense, it would follow that any dishonest agreement by directors to impede a company in the exercise of its right of recovery would constitute conspiracy to defraud. In their Lordships view a person can be guilty of fraud when he dishonestly conceals information from another which he was under a duty to disclose to that other or which that other was entitled to require him to disclose."

The remaining relevant characteristics of a conspiracy to defraud can be briefly stated. This offence requires proof of an agreement which may involve the commission of more than one offence. It has never been the law that proof of the conspiracy requires proof of every object or particular given in the indictment. It is enough that the jury are satisfied as to an agreement that one or more alleged victims should be defrauded in one or more ways specified.

On this analysis of the law we turn to the particular circumstances of this case. In so far it was alleged that there was a conspiracy to defraud PMH the prosecution case was that there was an agreement extending over several months and involving various stages, namely the purchase of Exide House, the leasing of part at a premium, the resale of the property and the extraction of the premium by means of the invention of the fictitious purchaser and vendor, KC. There was thus sufficient evidence upon which the jury could safely conclude that this course of conduct, primarily designed to achieve and conceal a profit to F through KC resulted in economic loss to PMH.

Moreover, there was, in our view, strictly speaking, sufficient evidence of a conspiracy to defraud Minty based on an agreement the object of which, while falling short of causing economic loss, embraced a right or interest of Minty which was capable of being prejudiced. During the subsistence of the agreement from August 1988 to April 1989 the jury could have concluded that the inter-position of KC and BP concealed that Minty were purchasing from their own Chairman and that had it not been for the intervention of BP KC would have sold direct to Minty for £1.8m.

Although a case might have been made out on this basis the prosecution did not so present it. They preferred the more straight forward application of Adams and concentrated on the assertion that F as a director (and Chairman) was throughout his tenure under a duty, when entering into transactions relating to the acquisition and disposal of Exide House, to act with perfect faith and to make full disclosure to the company of all material circumstances, or which Minty was entitled to require him to disclose. There was evidence that had Minty's other directors known of F's interest in the purchase which Minty was funding a class 4 circular to shareholders would have been required. F's recognition of the dishonest breach of his fiduciary duty to M was demonstrated by the use of BP as a cover for KC, that B had made a turn of £100k on the sale to Minty, and moreover, his blatant deceit in failing to tell his Board of Directors the truth at the critical meeting of 24 February.

Thus we consider that the prosecution were justified at the close of the evidence in proceeding on the basis that they could secure a conviction based on a conspiracy to defraud PMH and Minty. That did not mean that if the jury were not satisfied of the case regarding one of the companies the whole count failed. This was apparently the misapprehension in the defence camp at the start of speeches. Thus the judge was correct in interrupting the first defence speech and pointing out that the defence were in error in asserting that the Crown had to prove that both companies were defrauded or that there was intention to defraud both companies before they could convict.

Seen in the light of this analysis we conclude that there is no substance in this ground of appeal. In his summing-up the judge removed all doubt :

"The allegation by the Crown is that Mr Fussell and Mr Mendonca conspired together to defraud both PMH and Minty, and Mr Glass for Mr Mendonca conspired together to defraud both PMH and Minty, and Mr Glass for Mr Mendonca told you on Friday that that meant the Crown had to prove both companies were defrauded, or there was an intention to defraud both companies before you could convict. That is not so, in my view, and I direct you that if you are not sure that both companies were defrauded, but are sure that one was, so long as you all agree as to which one, that would be sufficient for a conviction."



This direction was in accordance with R v Brown [1984] 79 CAR 115, principle 2, that where a number of matters are specified in a count as together constituting one ingredient in the offence, and any one of them was capable of doing so, it is enough to establish the ingredient that any of them was proved; but that any such matter must be proved to the satisfaction of the whole jury. See also R v Handcock and others "The Times" 11th July 1996 where this Court held that in a case of conspiracy to defraud the fact that detailed particulars of an offence were listed in the indictment did not mean that those particulars were an essential ingredient of the offence and each had to be proved.

Moreover we consider the illustration of a conspiracy to rob

banks A and B both apt and helpful.



"Let me give you a similar example. Suppose there is a charge of conspiracy to rob bank A and bank B in the same High Street. Suppose you were quite satisfied there was ample evidence in regard to bank A but, for some reason, not sure about bank B. It would not be sensible or just in those circumstances for you to have to be directed to acquit the defendants in regard to bank A, and I do not do so here in these particular circumstances."


In our view the Judge was entitled to take the line that he did and to invite the jury to concentrate on one company only. It was inherently unlikely that the jury would have convicted on the basis of a conspiracy to defraud Minty alone. In the light of the Judge's correct direction it was unlikely that some of the jury convicted on the basis of PMH and others on the basis of Minty. Thus we reject the contention that the appellants were at risk of being convicted of three different conspiracies.

Finally we have to consider whether the defendants were materially prejudiced by the sequence of events. We must observe that it is unfortunate that the matter emerged in the course of leading counsel's final address on behalf of F. It would have been far more satisfactory if this had been raised at the close of the prosecution case or before speeches began. Such a discussion might well have alerted the defence to the fact that their line of defence was misconceived. It is asserted by each leading counsel for the appellants that if the defence had known that the Judge was likely so to direct he would have conducted his defence differently. Neither leading counsel indicated how he would have conducted his defence differently. Neither asserted that he would have called his client to give evidence. Consequently we consider the element of prejudice is not of such magnitude that we should be justified in interfering with the verdict.

Accordingly we reject this ground of appeal.

Ground Two

The second ground on behalf of both defendants asserts that the Judge failed to give any or any adequate direction on how to approach particulars (i) (ii) (iii) in the indictment or of the meaning of them. In particular criticism is made of the paucity of his direction at p.8c:

"What is alleged here is that Mr Fussell and Mr Mendonca agreed, conspired together, via a series of steps set out in paragraph one, little three in count one, to defraud each of the two companies. The essence of the conspiracy alleged is not that Mr Fussell and Mr Mendonca agreed to make profits from the companies, but (to) conceal secret profits from them. They have to be concealed, say the prosecution, because otherwise, in the circumstances, the companies would not have permitted the profits to be made. The circumstances in question being that Mr Fussell was a director, indeed a Chairman of each company."

After the jury retired they sent a note "Require direction. Dishonestly concealing the intention --".

This was clearly a reference to (ii)(b) which reads:


"By dishonestly concealing from PMH the intention that such profit should accrue to those charged."

For the avoidance of doubt the jury returned to verify that this referred to the indictment particulars (ii)(a) and (b) in Count 1 and whether they meant that the 2 appellants at the start had to intend that there was going to be a profit (from the lease to PR) or whether it arose incidentally and whether the intention had to be concealed. After prolonged discussions with the bar the judge eventually gave the following answer.

"The answer to your note I direct you is as follows: in regard to little two A and B alone, does the intention to profit and conceal such profit have to have been in the minds' of the defendants at the time of the agreement or, if the opportunity specifically to profit from the granting of the lease to Pacific Reality came later, is a later intention to profit and conceal sufficient? Answer: only in the former case is it sufficient. Do you want me to repeat that, or have you got it?

The Foreman of the Jury : I have got it. Thank you."

In other words he was indicating that the intention to profit and conceal the profit must have been already formed at the time of the agreement. This direction was concise and certainly not unfavourable to the defendants. It was clearly grasped by the foreman of the jury.

It is said that the Judge erred in giving the above direction and the answer because the elements set out were not in any event sufficient to ground a conspiracy in these circumstances. As it is put in the skeleton argument of F:


"Even if the learned Judge was entitled to sum up on the basis of Adams, he would have had to make it clear that, were the conspiracy to defraud alleged possible economic loss, to convict, the jury would have had to be sure that there was an agreement dishonestly to injure a proprietary right of the companies, by impeding by concealment the companies from exercising their right to recover any secret profit made at their expense."

Mr Winston Roddick QC on behalf of Mendonca in argument indicated a string of questions which the jury should have been invited to consider.

We can see no justification for such a convoluted and elaborate direction contended for by either of the appellants. This was not an unduly complicated or sophisticated fraud. On the face of F's undisputed conduct as to the creation of the mythical KC the appellants conspired to make a hidden profit through the sale of the freehold of Exide House to this mere phantom who supposedly sold it (by means of the forged Powers of Attorney) to BP who sold it on to Minty on the same day. The involvement of the fiction could only be to conceal F's involvement and to deceive F's fellow directors in both companies. In the absence of a plausible explanation the conduct reeked of dishonesty.

We accept Mr David Farrar QC's assertion that the Crown applied to amend the indictment following the decision in Adams. It is clear to this Court that the particulars given were drawn with that decision in mind. The jury had a copy of the indictment and the particulars were meticulously crafted and self evident from the careful use of language. It was thus not necessary for the judge to recite the particulars and no further explanation or exposition was called for.

It is also said that the summing-up failed to crystallise the issues for the jury as shown by the questions asked by the jury after retirement. We consider there are three answers :

1. As already indicated we brook no criticism of the summing-up itself.
2. The fact that the jury sent a note is not an indication that the summing-up was inadequate or muddled or that it had failed to crystallise the issues.
3. After the note was sent the judge strove mightily to achieve consensus at the bar as to how the answer should be framed. He then took a pragmatic course by asking the jury foreman to explain their difficulty at 105E :

"can you help to give me some indication of precisely what it is that is causing you the difficulty over this particular aspect of the case?"

The Foreman of the Jury : "It was actually the word, well, "conceal the intention". Was the intention already there to make the profit, or did the profit come as a consequence of the transactions that had already taken place?"

Thus all became clear. There was a further exchange which involved another member of the jury. There followed another discussion with counsel before the answer was given.

On the basis of the analysis of authority and close perusal of events we are satisfied that the directions of law are unassailable. The judge correctly identified the principles of law involved He accurately and succinctly directed the jury without unnecessary elaboration. When a query arose he discussed the matter with counsel and gave a satisfactory answer. Accordingly we reject this ground of appeal.


Ground Three

This ground alleges that the learned judge failed to direct the jury as to how to approach the question of lies allegedly told by the appellants. The Crown asserted both in opening and closing that F had deliberately and repeatedly lied in his affidavits and interviews with the police. Mr Suckling submits that this called for a 'Lucas' direction if not in its entirety, then in its modified form. Although the judge made references to the lies on two occasions in his summing-up the jury were given no direction as to the approach they should adopt towards any lies which they found that F had told.

For M, Mr Roddick makes the same complaint but emphasises that his case was not exactly similar to the co-accused. In interview M said that the powers of attorney were sent to him by F already signed. It transpired that F was out of the country at the date on which the documents purported to have been signed. He also said that he had seen KC at Heathrow Airport or at least a woman whom he believed was KC. His belief in her existence went to the whole basis of his case. If the jury was satisfied that KC did not exist they might easily be drawn to the conclusion that M's claim to have seen her at the airport was therefore not true. Thus the need for a Lucas direction arose.

On behalf of the Crown it was submitted that this was not a case that called for a Lucas direction in relation to either of the appellants.

In R v Burge and Pegg [1996] 1 CAR 163 this Court emphasised that a Lucas direction is not required in every case where the defendant gives evidence, even if he gives evidence on a number of matter and the jury may conclude in relation to some matters at least that he has been telling lies. The warning is only required if there is a danger that they may regard that conclusion as probative of his guilt of the offence which they are considering. How far a direction is necessary depends upon the circumstances of the case. The Court went on to identify four situations where a Lucas direction will usually be required. The two relevant to this appeal are :

1. Where the prosecution seeks to show that something said, either in or out of court, in relation to a separate and distinct issue was a lie and to rely on that lie as evidence of guilt in relation to the charge which is sought to be proved.
2. Where although the prosecution have not adopted such an approach the judge reasonably envisages that there is a real danger that the jury may do so.

In the case of F the argument that a Lucas direction was called for is stronger as his case fell within either or both of the above situations. However, it does not necessarily follow that the omission amounted to a non-direction so as to undermine the integrity of the verdict. The lies played a small (but not wholly insignificant) part of the case against him. In a trial which lasted about 4 weeks involving more than twenty witnesses and many documents the evidence relating to the two affidavits and the police interview was minimal. F did not give evidence and therefore there had been no cross-examination on the contents of his affidavits either by the Crown or his co-defendant. Thus if the direction had been given it might well have elevated or emphasised the importance of the lies which they had not merited in the course of the evidence. In these circumstances the judge still had a discretion whether to give such a direction. We are not persuaded that he erred in the exercise of his discretion in not doing so. In reaching this conclusion we bear in mind the fact that none of the experienced counsel involved thought it appropriate to point out the omission to the judge at the end of the summing-up even though they were ready to do so in other respects. We do not harbour suspicion that if the direction had been given the verdict against F would have been any different.

In M's case the lies were of little or no importance. The Crown did not rely upon the lies as part of its case to any significant extent. There was no reference to this part of the evidence against him in the summing-up. There was no reason for the judge to envisage a real danger that the jury might infer guilt from the lies alone. If M was wrong about seeing a lady who he thought to be KC it did not necessarily follow that it was a lie, merely a mistake. The case against him on the conspiracy was strong and on the forgery counts overwhelming. We are satisfied in his case that a Lucas direction would have been inappropriate. We have no reason to believe that if the direction had been given the jury would have acquitted on any of the 3 counts.

Ground Four

Finally it is asserted that the learned judge failed to put adequately the appellants defence to the jury. In particular he failed to remind the jury of the defence assertions that neither PMH nor Minty had suffered loss and that there was no intention of defrauding either PMH or Minty.

We are satisfied that these assertions are based on a misconception of the prosecution case (as explained earlier) and did not call for such directions by the judge. Other matters complained of were no more than jury points. Neither defendant gave evidence or called witnesses. Thus were was nothing of which to remind the jury.

Even so the judge said:

"As far as the defendants are concerned, neither defendant, as you know, has chosen to give evidence before you; but you will recall -- and I am going to remind you very briefly of the arguments that have been put forward on their behalf by Mr Suckling and Mr Glass -- it is said of Mr Fussell that he is a middle-aged man of good character, not some flash property developer. Why should he want to defraud two companies of which he was, in effect, the substantial owner himself; that neither company in reality lost anything; ---."


There follows two pages of transcript devoted to the arguments on behalf of F, followed by more than two pages of the arguments advanced by counsel on behalf of M. There are several other passages in the course of the analysis of the prosecution case where the defence argument is also spelt out. Accordingly we are satisfied that it was not incumbent upon the judge the go any further than he did and that it cannot be said that either of these defendants did not have a fair crack of the whip.

Accordingly, we have come to the conclusion that there is no substance in any of the individual grounds of appeal or collectively and thus there is no basis for us to conclude that any of the convictions is unsafe. The appeal of each appellant is dismissed.

Sentence

Leading counsel for F intimated that he did not wish to pursue the application for leave to appeal against sentence, and this application is also dismissed.

MR GRUNWALD: My Lord, may I only say this so far as Mr Fussell is concerned; I have had a limited opportunity to discuss the contents of the judgment with Mr Suckling, and he and I are both of the view that we would require some time to consider whether we will be asking this court to certify a point. I only mention that so that the court is on notice.

LORD JUSTICE OTTON: I think you also want us to dismiss the application in respect of sentence so far as Mr Fussell is concerned.

MR GRUNWALD: Yes.

LORD JUSTICE OTTON: Are there any other applications, Miss Gomes?

MISS GOMES: My Lord, no.


© 1997 Crown Copyright


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